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Price discounting is one of the oldest tricks in retail. Since time immemorial, shoppers have found it hard to resist a bargain, and that includes the opportunity to buy products for less than their advertised price.

It is a rare retailer – often in the upper echelons of the luxury market – who declines to take advantage of discounts. After all, getting a shopper to your store in the first place can be expensive. The ROI is often improved by selling a product for a little less if you can sell it right now.

Thinking About Price Discounts

There are really only a couple of considerations when setting up a price discount: how much of a discount and what will trigger it? The “how much” can be a percentage, an absolute value, or a free product. Triggers are diverse and might include the volume of products purchased, specific product categories, or customer behavior.

Price discounting is a powerful selling tool, but it can have negative consequences for a business if it isn’t handled properly.

Make sure the discount doesn’t leave the business in the red on a sale. For example, take care not to offer free shipping on a product that will cost more to ship than the discounted price – you’d be surprised how often that happens.

Excessive price discounting can damage a brand’s reputation. Apple rarely discounts its products: it wants to maintain a reputation as a retailer that sells premium products at premium prices. That brand image is worth more than a few extra discount-driven sales. Think about the impression you want you to make and who your ideal customers are before putting price discounts everywhere.


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